Expanding into the UK – all you need to know when starting a business in the UK

The UK is ranked one of the best locations for businesses looking to expand internationally. Starting a business in the UK can be challenging, but with the right set of tools and knowledge it’s a great place for business opportunities. The global environment, ease of doing business and strong market potential are of particular interest for overseas companies starting up in the UK.

When setting up a company in the UK, there are a number of registration requirements, regulations and obligations that need to be taken into account. This article highlights the most important things to consider when expanding your business into the UK.

Legal structures for market entry

When setting up in the UK, there are several legal structures to choose from. The company structure most suitable to you will depend on your type of business, where you are based and whether you have employees on board or not. Below are some of the most common legal structures in the UK;

  • Limited company
  • Branch office
  • Limited liability partnership (LLP)
  • Sole trader
  • Partnership

Limited company (LTD) is the most common form of business entity in the UK. A LTD company is a separate legal entity, owned by shareholders and managed by directors. The profits of a limited company are liable for UK corporation tax. Setting up an LTD company in the UK is a well-recognised structure that is quick and cost-effective to complete. With share capital starting at just £1, and with the risk contained within the subsidiary company, this is often the preferred route for international businesses expanding into Great Britain.

An international company may consider registering a branch office in the UK, rather than a LTD company. A branch office is not a separate legal entity from the head office company and full responsibility for the operations, debts and liabilities of the UK branch lie on the overseas parent company.

To find out more about the best option for you when expanding to the UK, please don’t hesitate to get in touch with Goodwille’s Legal Department. 

Set-up and registration

A company can typically be registered with Companies House in 48 hours once all documents are completed. A UK company must register for corporation tax with HMRC, within three months of starting to trade. The paperwork for registration is not too extensive, however, certain statutory documents will be required.

Bank account

In order to make any transactions, you’ll need to open a UK bank account for your business. Opening a bank account is a time-consuming process as you will need to go through a money laundering process to ensure your company is credible for a corporate bank account. Therefore, prepare to have time and patience for this stage, it can easily take up to six months or more to complete.

Check if your bank in the company’s home country has any operations in the UK. In some cases, this might speed up the process, as it may prove some creditworthiness for the business.

Regulations

The regulatory system in the UK is open and transparent, making it easy to do business. In general, the UK aims to minimise bureaucracy and deregulate marketplaces in order to allow companies to develop and expand. However, there are strict regulations e.g. with regards to employment, industrial emissions, pollution monitoring and control, and waste disposal. Make sure you are aware of the regulations that directly or indirectly affect your business!

All businesses operating in the UK are subject to UK law, and every company registered in the UK must have a registered address in the UK. By law, all UK companies must file their annual accounts with Companies House within nine months of the end of an accounting period. Additionally, a confirmation statement must be filed with Companies House every 12 months (within 28 days of the anniversary of incorporation).

To get all the details in order and prepare for the regulatory areas, you should look for specialist advice. Contact Goodwille’s Corporate Legal Department today if you have any questions regarding regulations or your business’ obligations in the UK.

Tax

Foreign businesses looking at overseas business opportunities in the UK will find a competitive and business-friendly tax regime. Companies need to consider their exposure to UK taxation, including corporate income tax, value-added tax (VAT) and employment taxes.

Companies may become subject to UK taxation in a number of ways, such as

  • Establishing a formal taxable presence in the UK, such as a branch or Ltd company, and making a profit.
  • Registering a company for VAT in the UK. Companies must be registered for VAT if their taxable turnover for any 12 months period is £85,000 or over. The current standard VAT rate in the UK is 20%.

It’s important to remember that an international business operating in the UK do not necessarily create a taxable presence in the UK. In order to be subject to UK corporation income taxation, an overseas business needs to be trading in the UK through a permanent establishment. To find out more about when you may need to register an entity in the UK, please contact us.

Employment

When employing people in the UK, you need to be aware of several regulations within UK employment law. To start with, make sure your employees have the right to work in the UK (that they hold a valid UK/EU passport or work permit/visa) and a NIN (National Insurance Number) for the deduction of taxes. Also, remember to follow the guidelines for UK employment contracts and provide these within 8 weeks of starting the employment.

In addition, you need to register you employees into a PAYE scheme (Pay-As-You-Earn: social costs of employment including income tax and National Insurance) and organise relevant company insurances. Every employer in the UK must also enrol their employees into the workplace’s pension scheme within three months after the start of the employment.

In terms of the remuneration, you must ensure the employees are paid at least the National Minimum Wage in the UK. As the recruitment market in the UK is highly competitive, also make sure your remuneration package is attractive enough and fits into the scope of the role.

If you are recruiting in the UK, you may want to turn to specialists who can help you with all the employer regulations and responsibilities you need to consider in the UK. Goodwille’s HR Department deals with these issues daily and are happy to help if you have any questions regarding UK employment.

To conclude

The UK market provides great opportunities for expanding your business, however starting up a business in the UK is a challenging process full of regulations. In order to get the set-up processes and ongoing compliance right, it’s good to turn to professionals who are able to provide you with advice and all the necessary help you need to get your business operations up and running correctly from the start.

If you are a foreign-owned business looking to expand into the UK, either through setting up a UK subsidiary or employing staff in the UK, Goodwille can help you to get the inside track. We have helped businesses expand into the UK for 20 years, and are experienced in Corporate Legal, Finance, HR and Payroll services in the UK. With a track record of supporting almost 2,000 businesses, we have extensive experience to help you grow your business. Get in touch with us today, if you are planning to expand to the UK or have any questions regarding the UK market.


Useful contacts for your business

When expanding your business to the UK, there are many organisations you may find useful.

Networking-wise, it’s good to get know your local chamber of commerce and see if their network is worth accessing. For example, Finnish-British Chamber of Commerce and Swedish Chamber of Commerce provide good opportunities for professional networking.

Also, when developing your strategy for the new market, Department of International Trade (DIT) provides free advisory and supports companies with their UK strategy and planning.

5 Great Book-Keeping Tips for Entrepeneurs

Keeping your books in order is one of the most vital elements of running your own business. As an entrepreneur, you know you need to have a clear view of your accounts at all times, and come tax season everything needs to be in line for your tax returns. It can be tricky knowing exactly what you should be doing, however, and how to streamline your bookkeeping so that it’s as efficient and effective as possible. Here are six great tips for effortless bookkeeping as an entrepreneur.

1. Go paperless

Cloud-based accounting is a great way to access all the basic bookkeeping functions you require for your business. By going paperless with your bookkeeping you will keep all the clutter and stress off your desk and ensure it’s securely saved in a dedicated system that’s specifically designed to handle it.

2. Keep business and personal finances separate

The easiest way to streamline your bookkeeping is to have a dedicated account for personal money and a dedicated business account. Never mix them. This is the fastest and easiest method of ensuring that all your expenses are in one place. No need to go through endless bank statements identifying individual transactions. If it’s on your business account, it’s a business expense.

3. Find a great adviser

While it’s possible to do a lot of your bookkeeping yourself, there will always be areas you have questions about and need some advice. It’s also highly advisable to get a professional in to handle your tax returns, and payroll is another area where you will greatly benefit from using a pro. Ensure you have, at the very least, an expert you can consult and ask questions whenever necessary. If your budget allows it, hand over all your bookkeeping and accounting needs to an expert – you will rest easier knowing everything is perfectly in order and you’ll have more time to focus on your business.

4. Save money for taxes

It’s easy to forget you have to pay taxes each year, especially when you’re starting out in business, and you may not meet the threshold for the first year or more. As soon as you’re earning enough that you have to pay taxes, make sure you’re setting that money aside so it’s ready and waiting when the bill is due.

5. Stay on top of your invoices

Any unpaid or late bills will affect your business credit and tax payments. Keep everything organised and make sure you pay it all on time.

Do you need help with book-keeping and are looking for a financial services provider for your business? Look no further –  get in touch with us at Goodwille today and we’re happy to help!

3 essential business elements you should consider outsourcing

When you’re running your own business the learning curve is astonishingly steep, the outlays immense, and your To-Do list endless. It can be overwhelming, intimidating, and incredibly stressful. It can also be extremely rewarding, fulfilling, and lucrative. The trick to getting it right is knowing how best to spend your time and resources. You must balance the requirements of your budget against the practical and logistical needs of your business. It’s tough making those calls, and a rookie mistake that almost all business owners make is believing they can save money by doing as much as possible themselves.

The reality, however, is that there is a finite amount of time you can spend working. Even if you work every waking hour of the day, you will hit a point where you just can’t do any more. Outsourcing is the solution to this, but it’s often a tough bullet to bite.

Many entrepreneurs cringe at the idea of paying someone to do things they could do themselves, but here’s the truth: a professional can do it far better than you can, in far less time, and the amount you will pay them to do a brilliant job is less than the amount you will earn by dedicating that time to what you really do best.

Here are three essential business elements that you should consider outsourcing.

#1 Bookkeeping

Getting your accounts and bookkeeping right is absolutely vital. It’s also very tricky, time-consuming, and stressful. Why not hand it all over to an expert who will ensure your books are in perfect order, and you always know exactly where you stand financially?

#2 Virtual Office

When there are so many things on your To-Do list and you are juggling a multitude of tasks and responsibilities, the telephone can easily become the bane of your existence. It’s constantly ringing, interrupting your train of thought, distracting you from vital tasks, and tying you up in lengthy conversations that you really needed to put off for a few days. You dream of a receptionist, but it’s not in your budget, and you don’t have space for another desk, anyway.

A virtual office is a solution. Not only will all your phone calls be taken care of by a professional, freeing you up to do more important things than answering the phone, but you will be armed with the knowledge of exactly who called, when, and why. This eliminates the possibility of missing phone calls and forgetting to call people back. It also enables you to dodge calls you’re not ready for, and deal with all those conversations in your own time. A virtual office also has the major benefit of providing you with a trading address, which is particularly handy if you work from home and don’t want to give your home address out to everyone and his wife!

#3 Tax Returns

Self-assessment is one of the most stressful elements of running any business. It’s a migraine-inducing nightmare, and if you get it wrong, or don’t get it done on time, it can also be very costly financially. Outsourcing your VAT work guarantees everything is handled in a professional, timely fashion, and there are no expensive mistakes!

If you’re considering outsourcing for your business, contact Goodwille today. We can provide more information about our essential business services and discuss how outsourcing will benefit you directly.